Business Booms At Ameco Beijing

Having completed an RMB1.5 billion, five-year expansion of buildings, hangars and infrastructure just 18 months ago, Ameco Beijing is having no trouble keeping the new facilities busy.

“We’re really full on airframe overhaul,” says Dr. Andreas Heizner, general manager and CEO of the joint venture between Air China and Lufthansa German Airlines. Ameco ranked No. 8 in the world in terms of airframe man-hours (2.8 million) and ninth in revenues ($488 million) in Aviation Week’s 2012 survey of top providers of maintenance, repair and overhaul (MRO).

More importantly, more business is coming from third parties.

With airframe overhaul showing a compound annual growth rate of 20% over the last five years, third-party business represented 78% of total airframe workload in 2011. Growth was 5% in 2012, but Heizner is happy both with the number of new airline customers, which now total around 100, and the amount of repeat business from overseas.

Third-party business now represents 40% of Ameco’s combined airframe, engines, components and line maintenance business.

In the last year Ameco has added A330 overhaul capability, and A320/321 landing gear repair. It redelivered the 200th heavy maintenance check for United Airlines on Boeing 747 and 777 aircraft, expanded its cabin modification business, and is installing WiFi in Air China’s A330s and Boeing777s with 737-800s and A320s to follow.

Ameco Beijing recently completed the first two of nine Airbus A380 wing modifications for a third-party client.

“The A380 program involves 30,000 man-hours per aircraft, or more than 50 days” says Heizner. “Our turnaround times on both were ahead of schedule due to very good program management.”

That performance stems largely from Ameco’s lean program that began in 2007.

Although revenues are rising, costs are growing, too—a problem, Heizner says, that everyone has. “Our answer is for higher productivity and better utilization of our facilities, and lean processes.” That has involved a long journey to instill a culture of lean that now extends into administration as well as the shop floor.

The results have been dramatic. “For example, we targeted a 10% reduction in turnaround time for a Boeing 777; we achieved 20%” says Heizner. “We set targets every year, and this shows they should be ambitious” rather than incremental.

Ameco Sees Growth in Line Maintenance

Line maintenance could be a growing business for Ameco Beijing, says general manager and CEO Andreas Heizner. It already accounts for about 30% of the MRO provider’s revenues, which totaled $488 million in 2012.

Ten international customers have signed up so far this year for Ameco’s line maintenance and release services at its Beijing base and other locations in China including Shanghai, Guangzhou, Tianjin, Qingdao, Chongqing and Nanjing. A new station at Chengdu received approval this month. It now handles more than 50 airlines.

“We have the ability and the infrastructure to take on more third party work,” Heizner says. Long-term customers of Ameco’s MRO are prime prospects for line maintenance as well, he adds.

Expansion of Ameco Beijing’s line maintenance will be coordinated with those of its shareholder, Air China, whose Air China Technic supports its own aircraft in many locations. “It is not our strategy to compete with them,” Heizner says, adding that there is only a small overlap where both operate at the same airport.